The Banco de Mexico left its key rate at 3.75
percent, as expected by all 15 analysts surveyed by Reuters this
week. In February, the central bank surprised markets with a
rate hike aimed at supporting the battered Mexican currency.

The peso has gained about 9 percent since the central bank
announced its half-percentage-point hike on Feb. 17 and
intervened directly in the foreign exchange market for the first
time since 2009.

The central bank said actions by financial authorities had
"broken a negative trend in the price of the national currency,
which had displayed an overreaction to an adverse external
environment" early this year.

A global rally in riskier assets had also helped lift the
peso against the U.S. dollar, the central bank said.

In a joint announcement with the central bank, Mexico's
finance ministry also said on Friday that it would cut spending
this year after weak oil prices hobbled government income from
sales of crude.

The peso has tumbled since late 2014 amid a slump in global
oil prices, but so far its losses have not stoked big increases
in inflation.

The central bank also said the country's inflation would
likely run "temporarily slightly above" its 3 percent target
this year, but that it would cool to below that level by the end
of the year.
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